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Mission Driven Business

Mission Driven Business

By: Brian Thompson
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 Diverse entrepreneurs share their experiences, strength, and hope to help mission-driven businesses thrive. In a series of intimate conversations, attorney and CFP Brian Thompson and his guests provide practical steps to create businesses with impact and profit. Economics Leadership Management & Leadership
Episodes
  • How to Optimize Your Tax Return for More Business Tax Savings

    How to Optimize Your Tax Return for More Business Tax Savings
    Apr 7 2026
    In this episode, Brian Thompson discusses key insights from the recent tax season, highlighting trends, surprises, and strategic opportunities for business owners to optimize their tax planning and financial health. Your tax return is not something to file and forget. If you pay attention, your tax return gives you a roadmap for what to do better this coming year. Brian also gives real-life examples of two clients that stood out this tax season. Understanding Unexpected Tax Outcomes One of the most significant stress points during tax season is the unexpected tax outcome. Many business owners were pleasantly surprised this year, either owing less than they anticipated or receiving larger refunds than expected. However, it's crucial to remember that a refund is not a reward and a tax bill is not a punishment. It simply reflects the reconciliation of what you owe versus what you've already paid. Increased Interest and Dividend Income This year also saw a spike in interest and dividend income for many business owners due to significant investment gains and the movement of cash into higher-yield savings accounts. While these gains are beneficial, they can also lead to increased taxable income, resulting in a higher tax bill than anticipated. Many individuals fail to account for all forms of income when calculating their estimated taxes, leading to potential penalties. It's vital to consider every aspect of your income when planning your tax estimates. Planning for Underpayment Penalties Self-employed individuals, in particular, have reported a rise in underpayment penalties. This situation can occur even if you make estimated payments but fail to do so on time or for the correct amount. If your income has increased but your estimated payments have not adjusted accordingly, the IRS will catch up with you. To avoid these pitfalls, ensure your estimated tax payments reflect your actual income. Regularly review and adjust your estimates as necessary to avoid surprises come tax season. How to optimize your tax return next year Benefits of increased SALT deduction This year, many clients experienced unexpected results due to changes in the state and local tax (SALT) deduction. For example, one high-income business owner noticed a significant drop in their tax bill, while another client could itemize deductions for the first time ever, despite having no mortgage interest. This is a huge shift for high-income earners in high-tax states. Since this is new, this is your opportunity to become proactive. Plan ahead and strategize around the timing of payment or entity-level tax elections. Maximizing Retirement Contributions One area where many business owners fall short is maximizing their retirement contributions. Many do not take full advantage of their solo 401(k)s or SEP IRAs, either out of lack of knowledge or because they think it's too late to contribute. Remember, these accounts can significantly reduce your taxable income while helping you build long-term wealth. Don't let procrastination or confusion keep you from maximizing your retirement contributions. You can still contribute until the filing deadline, so take advantage of this opportunity to lower your taxable income. Self-employed health insurance This is another area where proactive planning makes a huge difference. I've seen people miss these deductions or owe money unexpectedly. Make sure you review your Schedule 1 to ensure you are making the most of your deductions. The Importance of Bookkeeping The state of your bookkeeping is foundational to your tax return. Messy records can lead to missed deductions and poor decision-making, turning tax season into a stressful experience. Clean and organized books not only simplify tax planning but also improve cash flow and strategic deductions. If your books weren't well-maintained this year, take the time after tax season to ensure everything remains in order. Regular reviews will make tax time far less daunting in the future. Your Action Step Your tax return is not just a document to file away. It's a roadmap that highlights where you can improve and where opportunities have been missed. Take 30 minutes and review your tax return with this question: "What surprised me and why?" Was it a higher tax bill, a missed deduction or something you didn't understand? Every surprise is something you can fix next year. Resources + Links Newsletter Sign Up Follow Brian Thompson Online: Instagram, Facebook, LinkedIn, X, Forbes Follow & review the podcast: on Spotify and Apple Podcasts About Brian and the Mission Driven Business Podcast Brian Thompson, JD/CFP®, is a tax attorney and Certified Financial Planner® who specializes in providing comprehensive financial planning to LGBTQ+ entrepreneurs who run mission-driven businesses. The Mission Driven Business podcast was born out of his passion for helping social entrepreneurs create businesses with purpose and profit. On the ...
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    7 mins
  • S-Corps Explained: Tax Savings, Trade-Offs, and What No One Tells You

    S-Corps Explained: Tax Savings, Trade-Offs, and What No One Tells You
    Mar 24 2026
    The S-Corp question is one of the most common Brian hears from entrepreneurs, but the answer is almost never as simple as the internet makes it sound. In this episode, Brian Thompson breaks down what an S-Corp actually is, how the potential tax savings work, and the real-world trade-offs that often get left out of the conversation. Whether you're considering the election for the first time or revisiting the decision, this episode gives you the context you need to make an informed choice. What is an S-Corp? First, an important clarification: an S-Corporation is not a business structure, it's a tax election. Your business might legally be an LLC or a partnership, but you elect to have the IRS tax it under Subchapter S of the tax code. That election allows business income to pass through to the owner's personal tax return rather than being taxed at the corporate level. The key difference for most small businesses comes down to how payroll and self-employment taxes are handled. How Do S-Corps Save on Taxes? When you run a business as a sole proprietor or single-member LLC, your net profits are generally subject to self-employment tax of 15.3%, which covers Social Security and Medicare. With an S-Corp election, you pay yourself a reasonable salary (which is subject to payroll taxes) but any profits above that salary can be taken as distributions, which are generally not subject to self-employment tax. A straightforward example: on $200,000 in net profit, splitting it evenly between salary and distributions could save roughly $15,000 in payroll taxes. That's the number people are chasing when they talk about S-Corps. S-Corps Trade-offs The savings aren't guaranteed, and there are two major caveats. First, reasonable compensation. The IRS requires S-Corp owners who work in the business to pay themselves a reasonable salary before taking distributions. Reasonableness evaluation is based on your experience, role, time devoted to the business, and what comparable professionals earn. For service-based businesses where the owner is the primary revenue generator, this requirement can significantly limit how much income can realistically be treated as distributions. Second, administrative costs. Running an S-Corp means running payroll for yourself, filing a separate S-Corp tax return, issuing a K-1, maintaining better corporate records, and typically paying more for accounting and tax preparation. For some businesses the extra steps are worth it. For others, the time and cost eat too much into the savings. State and Local Tax Considerations for S-Corps For many entrepreneurs, particularly those in cities where a large share of LGBTQ business owners live, state and local taxes add another layer of complexity. Brian breaks down the specifics: Illinois S-Corps pay a 1.5% personal replacement tax; California S-Corps pay 1.5% on net income with an $800 minimum franchise tax; New York State imposes a fixed dollar minimum tax based on gross receipts; and New York City doesn't recognize the federal S-Corp election at all, meaning city-level corporate taxes of up to 8.85% can still apply. Washington DC has its own franchise tax currently at 8.25%. If you operate in Chicago, LA, San Francisco, New York, or DC, these rules need to be part of your analysis. The PTET Opportunity Despite the complications, Brian is clear: he recommends S-Corps for many clients when the numbers make sense. And there's an additional tool worth knowing about — the pass-through entity tax, or PTET. Created in response to the federal SALT cap, which limited state and local tax deductions on individual returns to $10,000, the PTET election allows the business itself to pay state income tax at the entity level, where it can often be fully deductible for federal purposes. The SALT cap increased to $40,000 in 2025, which reduces the urgency of this workaround for some. But for higher income business owners, PTET can still create meaningful additional savings on top of the payroll tax benefits. The Right Questions to Ask About S-Corps Instead of asking "should I become an S-Corp?", Brian reframes the question: Does an S-Corp make sense for my business? The considerations that matter include what type of business you run, how much profit you actually generate, whether revenue is produced primarily by you or a broader team, your willingness to handle the administrative requirements, the state and city tax rules where you operate, and how the decision fits into your broader tax and retirement planning. You also don't have to decide on day one. Many entrepreneurs start under simple tax treatment and elect S-Corp status once the business becomes profitable enough for it to make sense. Your Action Step This week, take three steps: look at your most recent business profit, estimate what a reasonable salary might look like for your role, and have a conversation with your tax advisor or financial planner about whether the numbers actually...
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    11 mins
  • Budgeting Series #3: A Guide to Building Your Financial Strategy

    Budgeting Series #3: A Guide to Building Your Financial Strategy
    Mar 17 2026
    Awareness and acceptance lay the groundwork, but nothing changes until you take action. In this final episode of the budgeting series, Brian Thompson brings the framework full circle by focusing on what to actually do with your numbers. Because understanding your finances and accepting where you are is only powerful if it leads somewhere. This episode is about making intentional, strategic decisions that move your mission-driven business forward. Start With Vision, Not Spreadsheets Before diving into tactics, Brian starts with something that might surprise you in a budgeting conversation: vision. Your budget is more than a financial document. It's a reflection of the business and life you want to build. Do you want a lean lifestyle business with flexibility and freedom? A growing company with employees and systems? A business optimized for profit so you can invest, travel, or retire early? There's no wrong answer. But the budget you build should reflect your vision, directing your money toward what matters most to you. The Three Financial Levers Once you know your numbers and your vision, the path forward becomes clearer. Brian outlines three levers every entrepreneur can pull. The Income Lever. Sometimes the most straightforward way to improve your financial picture is to focus on revenue growth. That might mean raising your prices, adding new services, improving your marketing, or increasing your capacity to serve more clients. The Expense Lever. Reducing expenses doesn't mean slashing everything or operating from a scarcity mindset. It means asking thoughtful questions: Are there subscriptions or tools you're no longer using? Services you could renegotiate? Expenses that don't actually move the business forward? As Brian noted in the first part of this series on awareness, sorting expenses from highest to lowest can reveal a lot. Sometimes one or two adjustments can significantly improve your financial flexibility. A Combination of Both. Most of the time, the right answer lives somewhere in the middle. A small price increase combined with trimming a few unnecessary expenses can create a surprisingly big impact on both sides of the equation. The Profit First Framework For clients looking for a practical system to manage cash flow, Brian recommends the Profit First model. Rather than treating profit as whatever is left over after expenses, Profit First flips the equation so you are allocating income intentionally across four key categories from the start: profit, owner's pay, taxes, and operating expenses. Setting percentages for each category and revisiting them quarterly creates guardrails that keep your business financially healthy and enforces a powerful mindset shift: profit is no longer an afterthought. It becomes a priority. Give Yourself Permission to Have a "Building Year" For anyone feeling pressure to make every year better than the last, Brian offers a grounding reminder: business growth is not a straight line. Some years are building years. Maybe you hired your first employee, invested in new systems, launched a new service, or restructured your client roster. In those years, expenses often increase before revenue catches up. And that's okay. Sometimes investing now is exactly what creates something better later. Your Action Step Look at the numbers you gathered during the awareness exercise and ask yourself one question: which lever do I need to pull right now? Do you need to focus on increasing income, reducing expenses, or a combination of both? Then identify one intentional change you can make this month. Just one. Small, consistent decisions are what ultimately build strong businesses. Thank you for following along with this three-part budgeting series. If there's one takeaway from awareness, acceptance, and action, it's this: budgeting isn't about restriction. It's about clarity, compassion, and intentional decision making. When you know your numbers, accept where you are, and take thoughtful action, you give your mission-driven business the foundation it needs to thrive. If you found this series helpful, share it with a fellow entrepreneur — and as always, Brian welcomes your questions and insights on Instagram at @BTFinancial. Resources + Links Episode 110: Budgeting Series #1: A Guide to Financial Awareness Episode 111: Budgeting Series #2: A Guide to Money Mindset Shifts Newsletter Sign Up Follow Brian Thompson Online: Instagram, Facebook, LinkedIn, X, Forbes Follow & review the podcast: on Spotify and Apple Podcasts About Brian and the Mission Driven Business Podcast Brian Thompson, JD/CFP®, is a tax attorney and Certified Financial Planner® who specializes in providing comprehensive financial planning to LGBTQ+ entrepreneurs who run mission-driven businesses. The Mission Driven Business podcast was born out of his passion for helping social entrepreneurs create businesses with purpose and profit. On the podcast, Brian talks with diverse ...
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    7 mins
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